A guide to get your business in shape for the new year
At the start of a new year, many people are making resolutions to set a budget, get organized or improve their health. But what about the health of your business? For business owners, a new year is a good opportunity to start with a clean slate.
To improve financial wellness, these are a few things to keep in mind as you tackle 2023:
Build a business plan
Think of a business plan as the foundation for your company that is going to guide you every step of the way. A business plan or financial plan for your business is handy for forecasting, budgeting and presenting your ideas to potential investors in the event you want to sell in the future. A solid business plan cannot simply stay in your head; it needs to be written down with detailed, comprehensive information that’s critical to you and your staff’s day-to-day operations. This is where your CPA and financial advisor can come into play – helping you form this plan and build out financial statements, financial projections, market analysis and more.
Develop a succession plan
Plan for retirement early, and plan for emergencies now. You’ve poured yourself into creating a business, and it’s important to ensure that it’s taken care of for the long term. Start by defining your vision – what are your goals for the future? Understand the valuation of your business, identify a successor and structure the transition in the way you want. At Willis & Machnik, we can help you through every step of the process – from analyzing the value of your company to facilitating an acquisition.
Create a plan for cash flow
Manage your cash flow instead of letting it manage you. For a business to not only survive, but thrive, it’s imperative to plan for cash flow management – and keep your cash working for you. Some business owners with excess cash flow might be tempted to immediately pay off debt when a wiser move could be to make tax-smart investments. Understand how the timing of making payments, spreading out your expenses and investing can prevent cash flow issues and pay off in the future.
Keep good records
This may seem obvious, but it’s often neglected. Your plan is only as good as your data. If you’re working with incomplete, inconsistent or inaccurate information, you can’t analyze where you are or where you’re going. Keep comprehensive, consistent records, and if you don’t have a system in place to do this, make it a priority.
Prioritize insurance and risk management
Does the insurance that you had last year still meet your needs? If your company is successful and growing, make sure your insurance grows with you. If the valuation of your business increases, you need even more protection from loss. Additionally, if you’ve added more staff, you’ll need to consider increased costs for updating your workers’ comp policy and health insurance. When you run a business, risk comes with the territory, but it can be managed with the right plan. Insurance plays a large part of risk management, as well as understanding how assets, debt and company policies can control risks. Consider all scenarios – from fires to data breaches to financial trouble – and plan for the response, business impact and recovery for each situation.
Get a financial advisor
Once you reach a certain level or have certain goals, hiring a financial advisor is the best way to fulfill your business’s potential and plan for its long-term financial wellness. While you are focused on today’s issues, such as operations and talent, a financial advisor can remain focused on growing your assets for the future.
We understand the challenges of owning and running a business. We will work with your attorneys and CPAs to identify financial benefits and pitfalls, with a tax-smart approach. No matter what your goals are, we want to be your first call. Contact us today to learn how Willis & Machnik can be your complete wealth management partner.